BLOOMSBURY PUBLISHING PLC

Unaudited Interim Results for the six months ended 31 August 2024

Upgrading full year expectations after record first half revenue and profit

Bloomsbury Publishing Plc (LSE: BMY, "Bloomsbury" or "the Company"), the leading independent publisher, today announces unaudited results for the six months ended 31 August 2024.

Commenting on the results, Nigel Newton, Chief Executive, said:

"Bloomsbury's strong results reflect implementation of the recently announced Bloomsbury 2030 vision, focused on our growth, portfolio and people. We have achieved our fifth consecutive double-digit growth in the first half with revenue growth of 32% to £179.8m, an increase of £43.1m, and profit¹ growth of 50% to £26.6m, an increase of £8.9m. We have acquired Rowman & Littlefield, significantly strengthening our academic portfolio. We have been awarded the Great Place to Work Certification^TM recognising the motivation and commitment of the people who work at Bloomsbury. Bloomsbury was admitted to the FTSE 250 on 1 August. Finally, we have risen to be the 39^th largest publisher in the world up from 51^st in 2020 according to the recent Global Publishing Ranking league table.

Consumer division revenue growth of 47% was driven by the continued success of our fantasy fiction and a wide range of bestsellers from cookery to novels. Bloomsbury was voted Children's Publisher of the Year 2024 at the British Book Awards and our international success was recognised by winning the British Book Award for Export. In the Academic division, we achieved revenue growth of 6%; the integration of Rowman & Littlefield is progressing well, its sales are on target and Bloomsbury Digital Resources ("BDR") grew by 2%. Rowman & Littlefield will accelerate BDR's growth, as Bloomsbury applies its proven ability to create digital revenues to Rowman & Littlefield's market leading titles.

Following our strong performance in the first half of this year and good trading in September and October, we now expect trading for full year 2024/25 to be ahead of the current consensus² expectation."

Operational Highlights

Consumer Division

Non-Consumer Division

Financial Highlights

Notes

For further information, please contact:

Disclaimer

Certain statements, statistics and projections in this announcement are or may be forward looking. By their nature, forward‑looking statements involve a number of risks, uncertainties or assumptions that may or may not occur and actual results or events may differ materially from those expressed or implied by the forward-looking statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Accordingly, forward-looking statements contained in this announcement regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which are based on the knowledge and information available only at the date of this announcement's preparation. The Company does not undertake any obligation to update or keep current the information contained in this announcement, including any forward‑looking statements, or to correct any inaccuracies which may become apparent and any opinions expressed in it are subject to change without notice. References in this announcement to other reports or materials, such as a website address, have been provided to direct the reader to other sources of information on Bloomsbury Publishing Plc which may be of interest. Neither the content of Bloomsbury's website nor any website accessible by hyperlinks from Bloomsbury's website nor any additional materials contained or accessible thereon, are incorporated in, or form part of, this announcement.

Chief Executive's Statement

Overview

Bloomsbury achieved the highest first half revenue and profit in its history in the six months to 31 August 2024. In May, we announced the Bloomsbury 2030 vision which is focused on our growth, our portfolio and our people. We are achieving our initial growth ambitions with the fifth consecutive double-digit growth in revenue and profit in the first half with revenue growth of 32% to £179.8m and profit growth of 50% to £26.6m. In May, we significantly strengthened our academic portfolio with the acquisition of Rowman & Littlefield. Turning to our people, we are proud to have earned the coveted Great Place to Work Certification^TM.

Within the Consumer division, the continued success of our authors in the fantasy genre, particularly Sarah J. Maas, alongside a wide range of other bestsellers, combined to achieve Consumer revenue growth of 47%.

Academic & Professional revenue increased by 6% and profit before taxation and highlighted items grew by 3%. Within this, Rowman & Littlefield is performing well and BDR increased sales organically by 2% to £13.7m, on track to meet our recently increased target of c.£41m BDR sales in 2027/28. While the academic market is experiencing budget pressure in the UK and parts of the US, we are well positioned given our long-term strategic focus on the shift from print to digital with BDR and having further deepened and broadened our subject areas with the acquisition of the 41,000 titles of Rowman & Littlefield. Since completion, we have identified and are implementing actions to enhance efficiencies in the newly enlarged division. Our positioning and strategy underpin our confidence in our academic division.

We are exploring the opportunity to monetise content through AI deals in a responsible and ethical manner.

Bloomsbury welcomes the passing into law of the Digital Markets Competition and Consumer Act 2024 to ensure a more level playing field between online retailers and publishers and authors than at present. With great power comes great responsibility but a regulator is essential to enforce it.

We are progressing with key infrastructure changes announced in the Bloomsbury 2030 vision to support growth and profitability. We have previously announced projects to change our UK distribution and warehousing arrangements and implement our new global royalties system; we are also strengthening our sales infrastructure with the creation of the US key account sales team replacing a third party commission sales arrangement. These initiatives are all on track.

We have successfully pursued our long-term strategy of combining general and academic publishing and have diversified across formats and territories. This strategy has created a portfolio of portfolios - a model that continues to provide the company with resilient growth and strong cash generation.

Group Financials

Bloomsbury achieved revenue growth of 32%, of which 26% was organic, to £179.8m (H1 2023/24: £136.7m). Group profit before taxation and highlighted items increased by 50% to £26.6m (H1 2023/24: £17.7m). Profit before taxation increased by 58% to £22.1m (H1 2023/24: £14.0m).

The acquisition of Rowman & Littlefield, completed on 28 May 2024, contributed revenue of £7.2m in the period, in line with our expectations. The acquisition drove an increase in highlighted items to £4.5m (H1 2023/24: £3.7m), consisting of the amortisation of acquired intangible assets of £3.7m (H1 2023/24: £2.5m) and one-off legal and other professional fees relating to acquisitions, integration and restructuring costs of £0.8m (H1 2023/24: £1.2m).

The effective rate of tax for the six months was 25% (H1 2023/24: 20%). The adjusted effective rate of tax, excluding highlighted items, was 23% (H1 2023/24: 19%).

Diluted earnings per share, excluding highlighted items, grew 41% to 24.68p (H1 2023/24: 17.47p).  Including highlighted items, profit before tax increased to £22.1m (H1 2023/24: £14.0m) and diluted earnings per share grew 47% to 20.10p (H1 2023/24: 13.66p). The interim dividend will increase by 5% increase to 3.89p per share (H1 2023/24: 3.70p).

Consumer Division

The Consumer division, which consists of Adult, Young Adult and Children's publishing, has had a stellar period, generating revenue growth of 47% to £131.3m (H1 2023/24: £89.4m). Profit before taxation and highlighted items increased by 91% to £21.4m (H1 2023/24: £11.2m). Profit before taxation increased to £21.2m (H1 2023/24: £11.0m).

The success of Sarah J. Maas continued with her new book, Crescent City: House of Flame and Shadow, which became a global No.1 bestseller on publication on 30 January 2024 and drove significant sales in her 15 backlist titles. The momentum continued with Sarah J. Maas' sales growth of 102% in the first half compared to the first half of 2023/24. As previously disclosed, we are not publishing a new frontlist Sarah J. Maas title in the second half of this year, therefore our exceptional Consumer performance in the second half of the last financial year provides a tough comparative. Bloomsbury has six future books under contract with Sarah J. Maas and will publish the paperback of Crescent City: House of Flame and Shadow in 2025/26.

Harry Potter title sales remain strong 27 years after first publication, demonstrating the enduring appeal of this classic series. The forthcoming Harry Potter TV series will introduce the books to new readers: Warner Brothers Discovery has announced that it is planning a seven season run of a new Harry Potter streaming series, based on the original seven books, to be broadcast on the Max streaming service.

The Three Body Problem by Cixin Liu, first published sixteen years ago, has seen strong sales in H1 2024/25, driven by the release of the Netflix series in March. Second and third seasons have been commissioned by Netflix, which we expect to drive further sales of the trilogy.

Bloomsbury was awarded Children's Publisher of the Year at the British Book Awards in May 2024. Katherine Rundell was recognised as the 'pre-eminent children's author of her generation' in being awarded Author of the Year and Book of the Year - Children's Fiction for Impossible Creatures. Bloomsbury author Atinuke was awarded Book of the Year - Children's Non-Fiction for Brilliant Black British History and Bloomsbury won The British Book Award for Export for the second time in four years.

Commercial and literary recognition for our authors continued, notably:

Non-Consumer Division

The Non-Consumer division consists of Academic & Professional, including Bloomsbury Digital Resources, and Special Interest. Non-Consumer division revenue grew by 3% to £48.5m (H1 2023/24: £47.3m). Profit before taxation and highlighted items was £5.2m (H1 2023/24: £5.9m). Profit before taxation was £1.7m (H1 2023/24: £3.6m).

Non-Consumer Division: Academic & Professional

Academic & Professional revenue increased by 6% to £38.5m (H1 2023/24: £36.4m), within which Rowman & Littlefield contributed £7.2m revenue in the three months since acquisition; organic revenue reduced by 14%. Profit before taxation and highlighted items increased to £6.0m (H1 2023/24: £5.9m) with margin of 16% (H1 2023/24: 16%). Profit before taxation was £2.7m (H1 2023/24: £3.7m).

The Academic & Professional market is experiencing budget pressures in the UK and parts of the US, against a background of student numbers being projected to grow worldwide.¹ Budgetary pressure in UK higher education institutions has been driven by a decrease in international students. In the US, pressure on small to mid-sized institutions has been driven by lower enrolment, to which contributing factors are demographics, the strong jobs market and high cost of living. However, demand from larger US institutions, which are major customers of ours, remains strong. Further, the shift from print to digital has continued to accelerate, resulting in lower sales of print academic books.

We have built Bloomsbury Digital Resources precisely to be ahead of this digital trend and digital sales are now 52% of division revenue. We have identified and are implementing actions to protect profitability and margin across the division, and we are adapting to the market with the broadening and deepening of our offering through the integration of Rowman & Littlefield's market leading titles and the expansion of subject areas, particularly business and psychology.

BDR revenue grew 2% organically to £13.7m (H1 2023/24: £13.3m). Our BDR growth strategy continues to build high margin, high quality, repeatable digital revenue from our market leading Academic & Professional IP. The strategically important acquisition of Rowman & Littlefield will accelerate BDR's growth, as Bloomsbury applies its proven ability to create digital revenues to Rowman & Littlefield's market leading titles, expanding BDR products and driving innovation. We reiterate our increased BDR target to reach c.£41m of revenue in 2027/28.

The integration of Rowman & Littlefield is progressing well. We are utilising our extensive experience of previous acquisitions in the integration of people and the IP, and trading since the acquisition has been in line with our expectations. Since completion, we have identified and are implementing actions to enhance efficiencies in the newly enlarged division.

Bloomsbury's Academic business combined with Rowman & Littlefield publishes c.97,000 titles, cementing Bloomsbury's strong market position in core subject areas and strengthening areas where the Group is building a presence including business and psychology. The acquisition enables us to focus the combined Bloomsbury Academic business on deeper global market penetration, subject area expansion and continued innovation in digital scholarship and learning. The actions undertaken and strength of our offering underpin our confidence in our Academic strategy.

Non-Consumer Division: Special Interest

Special Interest revenue was £10.0m (H1 2023/24: £10.9m) and loss before taxation and highlighted items was £0.8m (H1 2023/24: profit of £0.0m). This follows a strong performance last year. The Sunday Times Cycling Book of the Year 2024 was awarded to 1923: The Mystery of Lot 212 and a Tour de France Obsession by Ned Boulting and The People's Book Prize for Non-Fiction 2023/24 was awarded to Fearless: Adventures with Extraordinary Women by Louise Minchin. The British Book Awards highly commended Start-Up Century by James Wise.  The 2024 Wainwright Prize for Writing on Conservation highly commended Chantal Lyons' Groundbreakers: The Return of Britain's Wild Boar. Regular publications such as Wisden Cricketers' Almanack and Reeds Nautical Almanac remain loved by enthusiasts.

Acquisitions

The acquisition of Rowman & Littlefield's academic publishing assets for $83m on 28 May 2024 has significantly accelerated and strengthened Bloomsbury's academic publishing in North America and will benefit BDR in particular.

Bloomsbury has a successful track record in strategic acquisitions, with 34 completed. We will assess further acquisition opportunities in line with our long-term growth strategy, particularly within Academic.

Cash and Financing

Bloomsbury's cash generation was strong with net cash as at 31 August 2024 of £9.7m (H1 2023/24: £39.1m).

The Group has an unsecured term loan with Lloyds Bank Plc, used for the acquisition of Rowman & Littlefield alongside cash. This comprises a committed term loan of $37.5m and runs for 3 years to May 2027. 

The Group has an unsecured revolving credit facility with Lloyds Bank Plc. The facility comprises a committed revolving credit facility of £20m and an uncommitted incremental term loan facility of up to £20m. The agreement runs to November 2026.  At 31 August 2024, the Group had no draw down (H1 2023/24: £nil) of this facility.

Both facilities are subject to two covenants, being a maximum net debt to EBITDA ratio of 2.5x and a minimum interest cover covenant of 4x.

Dividend

The interim dividend will increase by 5% to 3.89p per share (H1 2023/24 3.70p). Bloomsbury has a progressive dividend policy and reiterates its intention to increase the dividend for the full year in-line with the Board's expectations.² The interim dividend will be paid on 29 November 2024 to Shareholders on the register on the record date of 1 November 2024.

Future Publishing

Our strong list for H2 2024/25 includes:

Current Trading & Outlook

Following our strong performance in the first half of this year and good trading in September and October, we now expect trading for full year 2024/25 to be ahead of the current consensus expectation.³

Note

1.     World Bank estimates that globally there will be 380m higher education students by 2030 up 73% from 220m in 2021.

2.     The Board considers consensus market expectation for the year ending 28 February 2025 to be 5% dividend growth.

3.     The Board considers consensus market expectation (before this publication) for the year ending 28 February 2025 to be revenue of £319.3m and profit before taxation and highlighted items of £37.5m.

Condensed Consolidated Interim Income Statement

For the six months ended 31 August 2024

The accompanying notes form an integral part of this condensed consolidated interim financial report.

Condensed Consolidated Interim Statement of Comprehensive Income

For the six months ended 31 August 2024

Items in the statement above are disclosed net of tax.

 Condensed Consolidated Interim Statement of Financial Position

At 31 August 2024